NEW YORK, July 16 (Reuters) - U.S. stocks advanced on
Wednesday and the Dow surged to a new intraday high, buoyed by
the latest merger news, as investors sorted through the latest
batch of corporate earnings.

Merger and acquisition activity continued to thrive on Wall
Street. Time Warner shares jumped 18.1 percent to $83.87
as the biggest boost to the S&P 500 after Twenty-First Century
Fox confirmed it made an $80 billion takeover offer for
the company that was turned down. Twenty-First Century Fox
shares lost 1.7 percent to $33.54.

Also supporting gains was chipmaker Intel, which
climbed 6.2 percent to $33.69 following second-quarter results
that topped analysts' estimates. The company also forecast
third-quarter revenue above Wall Street's expectations.

"It's a combination of M&A that has been pretty consistent -
about every day we wake up to at least one, if not two deals -
and earnings have continued to be good," said Bill Stone, chief
investment strategist at PNC Wealth Management in Philadelphia.

"Things have started off pretty well, we haven't seen a
whole lot outside of the financials but the few we have seen
have been pretty good."

A partnership struck between IBM and Apple Inc
also helped boost indexes. A deal was struck between
the tech giants in which IBM will exclusively sell iPhones and
iPads loaded with applications geared at enterprise clients this
fall. IBM shares gained 1.6 percent to $191.43 as the Dow's
biggest boost while Apple advanced 1.1 percent to $96.36.

The S&P technology sector gained 0.9 percent.

Bank of America lost 2.1 percent to $15.48 after the
second-largest U.S. bank by assets reported a 43 percent drop in
second-quarter profit as mortgage revenue fell and litigation
costs increased.

Yahoo shares also declined, slumping 4.4 percent to
$34.03 after disappointing second-quarter results and outlook,
although the company pledged to pay its shareholders at least
half the proceeds from Alibaba Group Holding Ltd's IPO-BABA.N
mega-IPO this fall.

In other merger news, Italy's GTECH will buy U.S.
slot machine maker International Game Technology for
$6.4 billion including debt. IGT shares jumped 8.8 percent to
$16.86.

The Dow Jones industrial average rose 46.1 points or
0.27 percent, to 17,106.78, the S&P 500 gained 6.09
points or 0.31 percent, to 1,979.37 and the Nasdaq Composite
added 19.19 points or 0.43 percent, to 4,435.58.

Producer prices rose 0.4 percent in June against
expectations calling for a 0.2 percent increase, with gains
across most categories, indicating some inflation at the factory
gate.

Other data showed industrial production edged up 0.2 in
June, but fell short of the 0.4 percent estimate. The National
Association of Home Builders/Wells Fargo housing market index
rose to 53 in July, a six-month high, from 49 in the prior
month.

After the closing bell, results are due from S&P 500
companies including eBay and SanDisk.

S&P 500 companies' profits are expected to grow 5.2 percent
in the second quarter, according to Thomson Reuters data, down
from the 8.4 percent growth forecast at the start of April.
Revenue is seen up 3.2 percent.
(Editing by Bernadette Baum)